Port Corpus Christi plans major oil export terminal on Harbor Island
Harbor Island is slated to become the first onshore location in the United States capable of servicing fully-laden Very Large Crude Carriers. The Port of Corpus Christi, in partnership with The Carlyle Group, announced Monday, Oct. 29, it expects the planned Harbor Island terminals to be fully operational by late 2020, including two loading docks on the island and crude oil tank storage on inland property across Redfish Bay.
“A project of this magnitude further underscores the vital role the Port of Corpus Christi plays in the global energy markets and as an important economic generator for the great state of Texas,” said Sean Strawbridge, the chief executive officer of Port of Corpus Christi. “In partnering with such an experienced and well-capitalized firm as The Carlyle Group, the market should take notice and have a high degree of confidence of this project’s success.”
The Carlyle Group is a global alternative asset manager with $210 billion in assets under management across 335 investment vehicles as of 2018. Through its investment infrastructure, Carlyle plans to secure private funding for a dredging project necessary to enable access to Harbor Island by the extra-large ships, commonly referred to in the industry as VLCCs. The channel will need to be dredged to at least 75 feet deep.
According to the Port of Corpus Christi, the project will reduce the national trade deficit by up to $50 billion a year, generate thousands of direct and indirect jobs in the Coastal Bend, and create billions in incremental economic activity in the region.
No taxpayer money will be used in any project development. The port will collect rental payments, volume-based tariff income, land grants, and other proceeds that can be used in its general operating budget. Carlyle’s equity for the investment will come from its Global Infrastructure Fund.
“Providing VLCC access at the port is of critical importance to the United States, and we will collaborate with all stakeholders to ensure such service is provided,” said Ferris Hussein, managing director on Carlyle’s Global Infrastructure team. “Carlyle appreciates the steadfast, prescient leadership provided by the Port of Corpus Christi Authority in advancing this project.”
The terms of agreement between the entities state that, together, the port and Carlyle will work to bring in world-class oil producers, marketers, pipeline operators, and marine terminal operators to insure that most of the new oil production in Texas will have a reliable way to get to international markets. This will solidify the port’s position as the nation’s energy port. Already, Port Corpus Christi exports more oil and gas products than any other port in the nation. Caryle has agreed to exclusively lead the construction and ongoing operations of the terminal.
“Corpus Christi is certainly where the incremental barrels want to go as we have deep water, availability of land for development and plenty of capacity to absorb the forecasted U.S. energy production growth in oil and gas,” said Charlie Zahn, chairman of the Port of Corpus Christi Commission. “Corpus Christi is open for business.”
Along the northeast perimeter of Corpus Christi Bay, Harbor Island lies within the city limits of Aransas Pass and Port Aransas. The proposed terminal is opposed by the Port Aransas Conservancy, a group that says on its website that it supports tourism and the fishing industry.
It supports an offshore terminal proposed by Trafigura over one based on Harbor Island. Reasons the group gives for opposing the terminal include the:
• environmental impact of placing dredged materials;
• location’s proximity across the channel from Roberts Point Park in Port Aransas;
• greater risk of oil spills and toxic pollution;
• increased erosion damages caused by tanker wakes;
• spill risks from pipelines in bay waters;
• and negative impact on tourism trade.
“The impact on Port Aransas’ tourism and fishing industries — not to mention property values and quality of life — would be dramatic,” reads a statement against the expansion on the conservancy’s website. “These issues are not top of mind for POCC, but they certainly are for us.”
Before proceeding, the project is subject to agreement on documentation between the port and Carlyle, satisfactory completion of due diligence, and final approval from Carlyle’s investment committee.
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